Correlation Between UBS Group and Banco Santander

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both UBS Group and Banco Santander at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining UBS Group and Banco Santander into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UBS Group AG and Banco Santander SA, you can compare the effects of market volatilities on UBS Group and Banco Santander and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in UBS Group with a short position of Banco Santander. Check out your portfolio center. Please also check ongoing floating volatility patterns of UBS Group and Banco Santander.

Diversification Opportunities for UBS Group and Banco Santander

UBSBancoDiversified AwayUBSBancoDiversified Away100%
0.56
  Correlation Coefficient

Very weak diversification

The 3 months correlation between UBS and Banco is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding UBS Group AG and Banco Santander SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Santander SA and UBS Group is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on UBS Group AG are associated (or correlated) with Banco Santander. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Santander SA has no effect on the direction of UBS Group i.e., UBS Group and Banco Santander go up and down completely randomly.

Pair Corralation between UBS Group and Banco Santander

Considering the 90-day investment horizon UBS Group AG is expected to under-perform the Banco Santander. But the stock apears to be less risky and, when comparing its historical volatility, UBS Group AG is 1.42 times less risky than Banco Santander. The stock trades about -0.13 of its potential returns per unit of risk. The Banco Santander SA is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  508.00  in Banco Santander SA on November 25, 2024 and sell it today you would earn a total of  95.00  from holding Banco Santander SA or generate 18.7% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

UBS Group AG  vs.  Banco Santander SA

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -50510152025
JavaScript chart by amCharts 3.21.15UBS SAN
       Timeline  
UBS Group AG 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in UBS Group AG are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental drivers, UBS Group is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb303132333435
Banco Santander SA 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Banco Santander SA are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain basic indicators, Banco Santander displayed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb4.555.56

UBS Group and Banco Santander Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.21-3.91-2.6-1.290.01.32.654.05.356.7 0.020.040.060.080.100.120.14
JavaScript chart by amCharts 3.21.15UBS SAN
       Returns  

Pair Trading with UBS Group and Banco Santander

The main advantage of trading using opposite UBS Group and Banco Santander positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UBS Group position performs unexpectedly, Banco Santander can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Banco Santander will offset losses from the drop in Banco Santander's long position.
The idea behind UBS Group AG and Banco Santander SA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
Check out your portfolio center.
Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.

Other Complementary Tools

Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites
Commodity Directory
Find actively traded commodities issued by global exchanges
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets
Price Transformation
Use Price Transformation models to analyze the depth of different equity instruments across global markets